Which of the following is NOT necessarily true in a market equilibrium?
A. Both rich and poor have adequate access to the good.
B. All mutually beneficial trades have been made.
C. Price represents the cost of an extra unit of production.
D. Price represents the value of an extra unit of consumption.
Answer: A
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Why is the competitive equilibrium price often referred to as the market clearing price?
What will be an ideal response?
Demand for clothing tends to be
a. elastic because there are few substitutes for clothing b. inelastic because there are few substitutes for clothing c. elastic because expenditures for clothing represent a large part of the consumer's budget d. inelastic because expenditures for clothing represent a large part of the consumer's budget e. elastic because it is a broadly defined good
Fiscal policy influences the levels of income and employment
A. through regulatory controls designed to stimulate business investment. B. through antitrust enforcement. C. through presidential and congressional "jawboning" (speeches and related verbal exhortations) designed to promote economic growth. D. through changes in taxes, transfers, and expenditures.
Which of the following is directly included in the calculation of GDP?
A. The final sale of a brand new Cadillac. B. The appreciation in value of shares of stock. C. The sales of land to a builder. D. The sales of sand to a glassmaker.